Eli Lilly and Company is a leading American pharmaceutical firm, founded in 1876, with a market cap of $842 billion, making it the most valuable drug company as of October 2024. The company specializes in various therapeutic areas, notably insulin and diabetes treatments, oncology, immunology, and neuroscience, and is involved in innovative research such as Alzheimer's disease treatment. A case study highlighted development costs of $1.5 billion and projected revenues of $800 million annually, indicating a profitable investment with a net present value (NPV) of approximately $1.3 billion and an internal rate of return (IRR) exceeding the investment rate.

1. Eli Lilly and Company

2. Participants names : -
1 – Mohamed Zidan ID NO .
23225308
2 – Mostafa Ashour ID NO .
23227095
3 – Ahmed Yasin ID NO .
4 – Abdelmasieh Mahrous ID NO .
23225530

3. About Company :-
• Eli Lilly Company, doing business as Lilly,
• an American multinational pharmaceutical company founded in 1876 by
Eli Lilly
• with offices in 18 countries. Its products are sold in approximately 125
countries.

4. • As of October 2024, Lilly is the most valuable drug company
in the world with a $842 billion market capitalization, the
highest valuation ever achieved to date by a drug company.
• The company is ranked 127th on the Fortune 500 with
revenue of $34.12 billion.
• Ranked the 11th
by Revenue from pharmaceutical drug and
vaccine Sales .

5. Key Products and Areas of Focus:-
•Insulin and Diabetes Treatments:
Eli Lilly is one of the largest manufacturers of insulin products, including brands like
Humalog.
They also focus on other diabetes medications, such as Jardiance and Trulicity.
•Oncology:
The company has developed treatments for various cancers, including drugs like Verzenio
(breast cancer) and Cyramza.

6. •Immunology:
Products like Taltz (psoriasis and arthritis) and Olumiant (rheumatoid arthritis, alopecia)
•Neuroscience:
Eli Lilly produces drugs for mental health conditions, such as Prozac (antidepressant), Cymbalta
(anxiety and chronic pain), and Zyprexa (schizophrenia and bipolar disorder).
•Other Innovations:
The company is involved in cutting-edge research, including work in Alzheimer's disease (e.g.,
Donanemab under development).

10. Case study for time value of money in Developing product :-
1.Development Costs:
1. Initial investment for R&D: $1.5 billion over 10 years.
2. Costs spread evenly over the development period.
2.Revenue:
1. Expected revenue: $800 million per year for 12 years post-launch.
2. Sales start after the 10-year development phase.
3.Discount Rate:
1. 10% annual discount rate, reflecting the opportunity cost of investment.
• Cash Flow Analysis
1.Development Phase (Year 0–9):
1. Yearly R&D expense: $150 million/year for 10 years.
2.Revenue Phase (Year 10–21):
1. Annual sales revenue: $800 million/year.

11. Present Value of Cash in and cash out :-

12. NPV and IRR for Cash in and cash out :-
• NPV = 2311.74 $-1013.85$ = 1297.88 Million USD

13. Analysis :-
•NPV is more than Zero and IRR is more than
investment rate so the development is profitable.
•Discounted payback period is 3.7 years.

14. From your knowledge of the cost of name-brand and
generic drugs, how do you believe the market share
of generics compares with the market share of
name-brand prescription drugs in dollar terms?

15. Firstly let us know the Difference between brand name and
Generic drugs